REPORT: Widening Divide in Canadian Pension Climate Leadership as CPPIB faces lawsuit

The growing divide between countries embracing the global energy transition and those actively resisting is reflected in the diverging climate approaches of Canadian pension managers, marked by a first-ever overall grade in the ‘A’ range for La Caisse and a tumbling score for CPPIB following its net-zero reversal.

Toronto, ON | Traditional territories of the Wendat, Anishnaabeg, Haudenosaunee, Chippewas and Mississaugas of the Credit First Nation.

Shift’s annual Canadian Pension Climate Report Card is an independent benchmark for evaluating the quality, depth and credibility of climate policies and strategies for 11 of Canada’s largest pension managers. The 2025 report reveals a stark and widening divide: while leading pension funds are implementing ambitious climate plans, scaling up multi-billion-dollar investments in climate solutions and centring climate risk in their portfolio strategies, backsliding funds are saying less about their climate strategy, gambling billions on fossil fuel expansion, and retreating from climate commitments.

Most notably, 2025 saw the Canada Pension Plan Investment Board (CPPIB) abandon its net-zero target – the only instance of such a retreat from a major Canadian pension fund.

This divergence comes as the financial impacts of the climate crisis are being felt widely by Canadians from coast to coast. Devastating wildfires, floods and extreme heat have become commonplace – damaging infrastructure, harming public health, slowing economic growth, and increasing the cost of living. At the same time, worsening geopolitical instability and an accelerating energy transition are amplifying both risks and opportunities for investors.

“The gap between climate leaders and backsliders is no longer a matter of nuance. It’s widened to reveal a fundamental split in how pension managers view their duty to their members,” said Laura McGrath, Senior Manager at Shift. “Leading funds are backing away from risky fossil fuel investments, while laggards continue to bet their members’ retirement savings on climate failure.”

For the first time, a Canadian pension manager has earned an overall grade in the ‘A’ range. La Caisse (formerly Caisse de dépôt et placement du Québec) secured the top spot with an A- following its launch of an ambitious and credible 2025–2030 strategy that pledges up to $400 billion toward climate action by 2030.

In contrast, CPPIB fell to an overall D grade as it retreated from its net-zero target and committed to invest an estimated $7.1 billion in new high-risk fossil fuel and pipeline assets in the year between October 1, 2024, and September 30, 2025. CPPIB also appears to have abandoned its previous commitment to invest $130 billion in “green and transition assets” by 2030 and no longer seems to have an active, publicly-disclosed climate strategy. 

In October 2025, four young Canadians launched a lawsuit alleging that CPPIB is violating its fiduciary duty to protect their best interests by failing to adequately manage climate-related financial risks while continuing to expand fossil fuel exposure.

With systemic climate risks threatening the entire global economy, pension funds can no longer afford to sit on the sidelines. A failure to stabilize the climate threatens entire portfolios, undermines long-term returns and puts members’ retirement security at risk. Credible strategies to align pension portfolios with a safe climate are not optional – they are required to meet fiduciary obligations, as minimizing global temperature rise will result in the strongest long-term financial outcomes for plan members.

“CPPIB manages three-quarters of a trillion dollars on behalf of 22 million Canadians. Their outsized investment decisions and enormous ownership power mean they are an essential part of solving the climate crisis," said Lee Ramsay, a retired librarian from Toronto, Ontario and member of the Canada Pension Plan. “It’s clear that the best outcomes for the climate, the economy and my retirement security require the lowest possible amount of global warming. I’m not sure if CPPIB actually understands this.”

The report also reveals a troubling “greenhushing” trend – a noticeable pullback from some funds in updating climate strategies, setting interim climate targets or publishing climate-related disclosures. The Ontario Teachers’ Pension Plan (OTPP) hasn’t updated its climate strategy in over three years. The British Columbia Investment Management Corporation (BCI) and Public Sector Pension Investment Board (PSP Investments) have no emissions reduction or climate investment targets beyond 2025 and 2026, respectively. The Alberta Investment Management Corporation (AIMCo) hasn’t released climate-related disclosures since 2023, and received an overall F grade for the second year in a row. All of these Maple 8 funds saw their scores decrease in at least one category in 2025, with OTPP and PSP seeing their overall grades fall.

“A child born this year will turn 25 in 2051 and 65 in 2091,” said Kevin Philipupillai, Research Lead at Shift. “As an author of this report and as someone whose first child will be born in the coming weeks, I am looking for pension managers to protect our future through a worsening climate crisis and a decarbonizing global economy. Attempting to go quiet on climate risk is not a strategy.”

Despite climate backsliding from some of Canada’s largest pension funds, Ontario’s University Pension Plan (UPP) held steady in a leadership position with an overall score of B+. The Ontario Municipal Employees Retirement System (OMERS) was the only fund other than La Caisse to see its overall score improve this year, pulling into the ‘B’ range. The Healthcare of Ontario Pension Plan (HOOPP) continued to implement its climate strategy in 2025 and maintained its C score, with the pension manager’s partial exclusion on new coal and oil investments going into effect at the end of the year. 

Read the full report and find detailed climate analyses of individual pension funds here.

For interview requests:

Adam Scott, Executive Director, Shift 
adamscott@shiftaction.ca, 416-347-3858

Patrick DeRochie, Senior Manager, Shift
patrick@shiftaction.ca, 416-576-2701